British Expats Face Financial Hardship Due to Frozen State Pensions
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British pensioners who have relocated abroad are facing significant financial challenges due to the UK’s policy of freezing state pensions in certain countries. This policy affects retirees who have moved to countries without reciprocal social security agreements with the UK, such as Australia, Canada, and South Africa.
The UK’s state pension system, which is based on National Insurance contributions, offers annual increases known as the “triple lock.” This mechanism ensures that pensions rise each year in line with inflation, average earnings, or by 2.5%, whichever is highest. However, this annual uprating does not apply to pensioners residing in countries where the UK has not established reciprocal agreements. As a result, their pensions remain fixed at the amount they were receiving when they moved abroad.
For instance, Anne Puckridge, a 99-year-old former wartime intelligence officer, has seen her state pension frozen at £72.50 per week since she moved to Canada in 2001. Had she remained in the UK, her pension would have increased to £169.50 per week by 2024. Over the past two decades, this policy has cost her an estimated £50,000 in lost income.
The International Consortium of British Pensioners (ICBP) estimates that approximately 480,000 UK pensioners living abroad are affected by this policy. These individuals often find themselves receiving significantly less than their counterparts residing in the UK. For example, pensioners in “frozen” countries may receive as little as £65 per week, compared to £169.50 per week for those in the UK. Pensioners have made full National Insurance contributions during their working lives. They contend that the UK government should honor these contributions by ensuring that all pensioners receive the same benefits, regardless of their country of residence.
In response to these concerns, the UK government maintains that the policy is based on longstanding agreements and that any changes would require significant financial considerations. However, advocates for pensioners assert that the current system is inequitable and call for reforms to address the disparities faced by retirees living abroad.
